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Managing Personnel Files

Essential Employee Records

Dealing with paperwork is a necessary evil for many HR professionals. While following proper recordkeeping procedures is a big undertaking, taking the time to correctly set up and maintain personnel files pays off in the long run. The documents you collect help support employment decisions, like promotions or terminations, and function as evidence in lawsuits, audits or investigations.

Most employers maintain three different kinds of personnel records:

Personnel files
This is the main component of employee records. These documents cover the history of employment, including everything from hiring paperwork to performance reviews.
Payroll files
Any paperwork related to salary, benefits or monetary awards should be included in a separate file.
Medical files
Any documents that relate to medical conditions – Family and Medical Leave Act (FMLA) paperwork, health insurance forms or doctor’s notes, for example – should be stored separately from other personnel records. These records are subject to HIPAA regulations and must be kept confidential.

Maintaining Personnel Files

The personnel file is the bread and butter of employee records. These files contain the history of the employment relationship, from hiring forms through exit interviews or termination documents. You should set up a personnel file for each employee from the date of hire, including:

Job description for the position
Job application
Employee resume and cover letter
Offer letter or employment contract
Employment agency agreement, if applicable
Receipt or signed acknowledgment of employee handbook
Emergency contact information
Verification your employee went through orientation or onboarding process
Any additional contracts, written agreements, receipts, or acknowledgments between the employee and the employer (for example, a non-compete agreement or signing bonus)
While I-9 forms, which verify eligibility to work in the U.S., are an essential document in the hiring process, these forms should be stored in a separate folder for all employee I-9 forms. These documents are subject to government inspection, so storing them separately ensures other employee information is kept confidential and secure.

Personnel files should also contain documents related to employee performance, such as:

Performance reviews or employee development plans
Notes on attendance or tardiness
Performance improvement plan documentation
Disciplinary forms
Employee recognition
Training records
Complaints from customers or coworkers

Once employment ends, there are additional documents that should be saved and maintained in the personnel file:

Employee resignation letter
Exit interview documentation
Termination paperwork

Because these files cover a wealth of information, it’s easy to get buried in documents. To keep your files streamlined but useful, try to pare down as much as you can. Before storing any documents in the personnel file, consider these questions:

Does this document reinforce any employment decisions?
Could this paperwork hold up as evidence in court?
Is the employee aware this document will be stored in his or her personnel file?
Is this information subjective or objective?

Employee Payroll Files

Aside from personnel files, you also need to maintain paperwork on employee pay and benefits in a payroll file. These documents should include anything related to payment, such as:

Offer letter with salary information
W-4 form
Paperwork and authorization for employee benefits involving payroll deductions
Direct deposit authorization
Hourly/weekly time sheets and time clock records, if used
Attendance records, including time-off requests
Expense reimbursement requests with supporting documentation and receipts for travel and other authorized expenditures
Pay advance request forms
Garnishment orders and records
Paperwork related to raises
Paperwork related to any bonus, profit sharing or recognition award
W-2 forms
Any payments related to termination, such as final paychecks, payment for unused time-off or bonuses returned due to early termination

Keeping Medical Files Confidential

Employers should also maintain employee medical files for everything related to employee health, health benefits and medical-related leave. These documents can include:

Health and life insurance application forms
Applications for other employee benefits that require medical information
Requests for medical leaves of absence
FMLA paperwork
Medical certifications
Medically related excuses for absenteeism or tardiness
Requests for reasonable accommodation under the Americans with Disabilities Act
Medical job restrictions
Accident and injury reports, including workers’ compensation and OSHA paperwork

Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), employers are required to protect employee medical records as confidential. As such, all medical paperwork must be maintained in a separate folder from other employee or business records. Access to these files should be limited to HR staff.

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HR Solutions Manager
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